Asia Pacific Telecom Co. Ltd.

Case:

Key Words:

comparative advertisement, international call rates, promotion package, gift advertisement, No. 1 brand in sales

Reference:

Fair Trade Commission Decision of May 6, 2009 (the 913rd Commissioners' Meeting), Disposition Kung Ch'u Tzu No. 098073

Industry:

Telecommunications (6100)

Relevant Laws:

Article 21 and 24 of the Fair Trade Law

Summary:

1. The complainant reports the"Happy 888" advertisement published on Apple Daily, 2008 (hereinafter referred to as the disputed advertisement). The disputed advertisement was published by Asia Pacific Telecom Co. Ltd (hereinafter referred to as APTC). In the"comparative table of international call rates" (hereinafter referred to as the disputed table) of the disputed advertisement, the"promotion package" column for"Sparq" marked"N/A" which was different from the facts. Sparq is a brand of New Century InfoComm Tech Co., Ltd. (hereinafter referred to as NCIC), a competitor of APTC. Further, in the disputed advertisement Sparq's call rate for China was wrongfully specified as NT$34.2 for 3 minutes and NT$114 for 10 minutes. In addition, promotion plan in the disputed advertisement specified that"we cooperate with ‘the No. 1 brand in sales in domestic drug stores' – For Beloved One;" but there are no objective data supporting"For Beloved One" to be the No. 1 brand in sales.
2. Investigation and Result
   1. We found that, NCIC has proposed the Sparq"007 Promotion for June" at the time APTC published the disputed advertisement. Sparq's promotion plan allowed mobile users to make calls to China at the rate of NT$ 0.092/second during discount hours. However, the disputed table failed to specify Sparq's promotion on"007 international calls" in the column of"promotion package" (“N/A" was what shown in the column).
   2. The disputed table used billing amount to calculate fees for Sparq's"007 international calls," rather than the actual fee charged in the promotion plan. However, when mobile users make calls to China during the specified discount period under Sparq's promotion plan, the actual charge for 3 minutes and 10 minutes would be NT$16.56 and NT$55.2, not NT$34.2 and NT$114, as listed in the disputed table. APTC failed to disclose in full the formula for calculating fees.
   3. Regarding the marketing pharse"No. 1 in sales," APTC admits that it was solely based on a promotion posted on 2005/7/4 E4 page of Apple Daily, where the prize in lottery is"the No. 1 brand in sales in domestic drug stores;" there are no further supporting data.
3. Grounds for Disposition
   1. As shown by the above facts, NCIC already promoted Sparq"007 Promotion for June" at the time APTC published the disputed advertisement. However, the disputed table marked"N/A" in the column of"promotion package" for Sparq's"007 international calls." This could make consumers falsely believe NCIC has no promotions on international calls at the time the advertisement was published. In addition, the disputed table failed to specify the formula and basis for determining fees. People may thus overestimate rates for"Sparq 007 international calls" and cause an unfair comparison. APTC made false, untrue and misleading representation as to the service and price of companies being compared; it violated Article 24 of the Fair Trade Law.
   2. The disputed advertisement was based upon a promotion published on the 2005/7/4 E4 page of Apple Daily, which asserted the offered prize is"the No. 1 brand in sales in domestic drugstores." There are no further data supporting sales figure at the time. In addition, the above report lacked objective sales data, survey methodology, and ranking criteria. It was not based upon objective evidence. Thus, the representations of brand/sales ranking in the disputed advertisement are false, untrue, and misleading. It violated Article 21(3) which applied mutatis mutandis to Paragraph 1 of the same Article of the Fair Trade Law.

Appendix:
Asia Pacific Telecom Co., Ltd.'s Uniform Invoice Number: 70771579
Summarized by Wu, Hsin-Te; Supervised by Chen, Chun-Ting